Notes from BLR Health Entrepreneurship Master Class
Notes from BLR Health Entrepreneurship Master Class
5yrs before the start of a massive inflexion point
Dad and I attended a health care entrepreneurship master class organised by the founder of SPASH Hospitals - Dr Sharan Patil - and hosted at the JW Marriott in the heart of Bangalore’s business district. Speakers included - Subroto Bagchi, founder of Mindtree and popular author; Vishal Bali, chairman of Asia Healthcare Holdings; Shravan Subramanyam, former CEO of Wipro GE; Ashutosh Raghuvanshi, CEO of Fortis; Nandakumar Jairam, former CEO of Columbia Asia and Devi Shetty, founder and CEO of Narayana Health. The agenda consisted of speaker sessions and panels, with some room for networking over lunch and coffee.
The quality of the sessions was high. As the above list lays bare, some of India’s leading healthcare builders were present, and the program was well-designed. Some take-aways and observations follow.
Cusp of Inflexion Point
Indian healthcare is on the cusp of a massive inflexion point, akin to what UPI did to finance, likely as soon as in 5yrs. This will be downstream from 2 exponential trends - rapid insurance penetration will transform India to a third-party payee system and software and AI will take increasingly large chunks1 out of healthcare processes. Coupled with the ambition and business-savvy of physician-founders and the strength of clinical, engineering, and entrepreneurial talent in the country, there is real potential for India, as Devi Shetty put it, to dissociate wealth from health — that is, for every Indian to have world-class healthcare in a country that will remain relatively poor for the coming decades. Critically, this will likely be an entirely different playbook from other countries as private players will have to pioneer new models that do not depend on the government stepping in with subsidies, given the sheer weight of providing care for 1.4+ B people.
What would such a model look like? No one seemed to have a concrete answer. Vishal Bali hinted that the future would involve healthcare companies being in the business of maintaining health vs treating sickness, with products and services that have lower margin but higher volumes becoming the norm. Ashutosh Raghuvanshi noted how tensions between providers and insurers will continue to escalate, and the need for providers to band together and establish a united front to avoid being gouged by increasingly powerful insurers. The clearest answer seemed to come from Devi Shetty, dubbed by the WSJ in 2009 as the Henry Ford of heart surgeries — Indian healthcare will need to adopt the ethos of a Tesla or Apple, baking in scaling efficiencies and data-driven automation to cut costs while continuing to deliver high-quality care.
It’s worth noting that Devi Shetty’s Narayana Health kicked off 2024 with the granting of a license to provide health insurance. An Indian version of Kaiser Permanente that leverages Big Data and AI to steward preventative and proactive medicine could be the dominant model going forward in the roaring ‘30s.
Leapfrogging
Relatedly, ‘Leapfrogging’ was mentioned a number of times. From ChatGPT -
The term "leapfrogging" in the context of technology and economics has been in use for several decades, although its precise origins are somewhat unclear. It generally refers to the idea that developing countries or regions can skip over certain stages of technological or economic development by adopting modern technologies directly, without going through intermediate steps that more developed countries did.
The concept became particularly popular in discussions about technology adoption in the developing world in the late 20th and early 21st centuries. For example, many African and Asian countries leapfrogged landline telecommunication infrastructure, moving directly to mobile networks.
What tech and economic trees can be skipped in healthcare? Mention was made of - surprise, surprise - AI, and its applications in diagnostics and patient management as well as the new universal and interoperable EHR - Ayushman Bharat Digital Mission (ABDM). I’m still unclear on how exactly these advances would allow India to leapfrog her healthcare trajectory, and what standard healthcare trajectories tend to look like. But just like UPI allowed a jump from cash to mobile, skipping cards altogether, it seems intuitive that something similar is possible with healthcare.
Dominance of the Physician-Operator
It was interesting to see and hear from the number of physician-founders/physicians-operators and how much this archetype has influenced India’s healthcare ecosystem. From Apollo (India’s largest with 70 hospitals) to Manipal Hospitals (28 hospitals) to Narayan (16 hospitals), all were founded and many are still operated by physicians, who continued to literally operate as well, even when managing multimillion-dollar companies.
Interestingly, Prathap C. Reddy (Apollo), Devi Shetty (Narayana), and Ashutosh Raghuvanshi (CEO Fortis), are also all cardiologists. According to Ashutosh, cardiologists emerged as leading founders of private hospitals because in the 80’s-90’s, Escorts Heart Hospital (bought by Fortis in 2005), a cardiac focused center, was the leading private hospital and it appeared back then that cardiology was the only model where private healthcare could succeed in India.
Someone brought up how the US system of having doctors first complete a liberal-arts education leads them to being better-rounded physicians. It was interesting to contrast this with India, where many of the doctors at the event seemed well-versed with finance, technology, operations and even branding/marketing. This seems in continuation of the trend I’ve noticed, for instance in EV India vs EV Global winners, where being in India tends to optimize for practical know-how and skills in ‘getting things done’ versus more abstract philosophical and intellectual engagements. Perhaps this is one factor of the rise of the Indian CEO?
Families vs Corporates
There was a whole session on how family-run enterprises compare to corporate-led ones. Both large chains (such as Narayana) and smaller single-unit hospitals often have siblings and children who continue to direct operations, with outside management sometimes but not always involved. It made me wonder two things -
How unique is this to India? It does seem like a uniquely Indian phenomena where the children of doctors often become doctors themselves, and then continue to practice and operate the same hospital(s).
How unique is this to healthcare? Family-run businesses are also a staple of the Indian ecosystem (Tatas, Ambanis).
Scaling and Specialisation
Vishal Bali made a forceful case that single-speciality hospitals were much better suited to scale, taking advantage of the ease of replicating processes and capitalising on market advantages. In line with this thesis, Asia Healthcare Holdings has invested in American Oncology, NOVA IVF Fertility, and Motherhood Hospitals. There was pushback that aside from certain fields (like eye care, joint replacements), most hospitals need to be multi-speciality because you need the ability to have in-house expertise - i.e. an orthopaedic center dealing with trauma cases needs cardiologists at hand. I’d never thought about scale and specialisations in this context, so it was interesting to think about.
Global Aspiration
While banners and calls for Building in India for the Globe are erected and issued so frequently that it can often ring hollow, it has also begun to gather significant heft. There was a clear sense of global aspiration permeating the event. India already is a major resource of nurses to the rest of the world (especially in the Middle East) and with the largest number of young, English-speaking, healthcare workers, and an ageing global population, this trend will likely accelerate. Medical tourism in India is a $5B+ market and will cross $15B+ by 2030. Narayana Health operates a hospital in the Cayman Islands, and Fortis has a presence in the UAE, Nepal, and Sri Lanka.
Most interestingly, India will offer an unparalleled opportunity to conduct super-powered and full-stack clinical studies, especially once ABDM is fully online, with the possibility of Nordic-style population-level studies at 2-3 orders of magnitude higher sample sizes.
Ir was interesting to hear Devi Shetty explicitly quote Marc Andreessen on how software will eat the world and how Narayan Health runs a 350-member strong in-house software division.
Wonderfully written though many other important take home lessons were there too
Indias future healthcare in India are sad but truth:a Rural people face the CRISIS of doctors and money because most doctors settle in urban areas. They have to travel long distances to reach a doctor. About five lakh people die from tuberculosis every year. Almost four million cases of mal aria and dengues are reported every year.